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If 2 people sign a quit claim on an investment property they…

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If 2 people sign a...

If 2 people sign a quit claim on an investment property they own with 1 other person, will there be tax consequences tantamount to selling 2/3 of the investment property to the 1 person who will be left in the title.

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If the property is being transferred as a gift, the federalgift tax is applicable, and the tax is assessed on the fair market value of the property. Gifts over the annual exemption amount of $14,000 must be reported by each owner quitclaiming his/her interest, but are not taxable unless the lifetime exemption amount of $5.43 million has been met.

If the quitclaim deed is being used for the sale of a property, then the capital gains tax applies. The capital gains tax is calculated based on any profit from the sale, and each person would report his/her share of the sale.

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Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.